Tamil Nadu Fiscal Responsibility Act, 2003
No: 16 Dated: May, 19 2003
TAMIL NADU FISCAL RESPONSIBILITY ACT, 2003
An Act to provide that it shall be the responsibility of the State Government to ensure fiscal stability and sustainability, and to enhance the scope for improving social and physical infrastructure, and human development by achieving sufficient revenue surplus, reducing fiscal deficit and removing impediments to the effective conduct of fiscal policy and prudent debt management through limits on State Government's borrowings, debts and deficits, greater transparency in fiscal framework and for matters connected therewith or incidental thereto.
Be it enacted by the Legislative Assembly of the State of Tamil Nadu in the Fifty-fourth Year of the Republic of India as follows:-
1. Short title and commencement. - (1) This Act may be called the Tamil Nadu Fiscal Responsibility Act, 2003.
(2) It shall come into force on such date as the State Government may, by notification, appoint.
2. Definitions. - In this Act, unless the context otherwise requires:-
(a) "Budget" means the Annual Financial Statement laid before the Legislative Assembly under Article 202 of the Constitution;
(b) "current year" means the financial year preceding the ensuing year;
(c) "ensuing year" means the financial year for which the budget is being presented;
(d) "financial year" means the year beginning on the 1st April and ending on the 31st March next following;
(e) "fiscal deficit" means the excess of total disbursements from the Consolidated Fund of the State (excluding repayment of debt) over total receipts into the Consolidated Fund excluding the debt receipts during a financial year;
(f) "Fiscal Indicators" means the measures such as numerical ceilings and proportions to Gross State Domestic Product, as may be prescribed, for evaluation of the fiscal position of the State Government;
(g) "previous year" means the financial year preceding the current year;
(gg) "Revenue deficit" means the excess of revenue expenditure over revenue receipt;
(h) "total liabilities" means the liabilities under the Consolidated Fund of the State and the Public Account of the State.
3. Medium Term Fiscal Plan to be laid before the Legislature. - (1) The State Government shall lay before the Legislative Assembly a Medium Term Fiscal Plan along with the Budget.
(2) The Medium Term Fiscal Plan shall set forth a multi-year rolling target for the prescribed fiscal indicators with specification of underlying assumptions.
(3) In particular and without prejudice to the provisions contained in subsection (2), the Medium Term Fiscal Plan shall include an assessment of sustain-ability relating to,-
(i) the balance between revenue receipts and revenue expenditure;
(ii) the use of capital receipts including borrowings for generating productive assets.
(4) The Medium Term Fiscal Plan shall, inter alia, contain,-
(a) the medium term fiscal objectives of the State Government:
(b) an evaluation of the performance of the prescribed fiscal indicators in the previous year vis-a-vis the targets set out earlier, and the likely performance in the current year as per revised estimates;
(c) a statement on recent economic trends and future prospects for growth and development affecting fiscal position of the State Government;
(d) the strategic priorities of the State Government in the fiscal matters for the ensuing financial year;
(e) the policies of the State Government for the ensuing financial year relating to taxation, expenditure, borrowings and other liabilities, lending and investments, pricing of administered goods and services and description of other activities, such as guarantees and activities of Public Sector Undertakings which have potential budgetary implications and the key fiscal measures and targets pertaining to each of these;
(f) an evaluation as to how the current policies of the State Government are in conformity with the fiscal management principles, set out in section 4 and the fiscal objectives set out in the Medium Term Fiscal Plan.
(5) The Medium Term Fiscal Plan shall be in such form as may be prescribed.